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Analyzing APD's Latest Dividend Yield and Dividend Payment

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Analyzing APD's Latest Dividend Yield and Dividend Payment PART 1 OF 5

APD Didn’t Change Its Final Quarterly Dividend for 2017

APD’s final dividend for 2017

Air Products and Chemicals (APD) will pay the final dividend on its outstanding common stocks for 2017. It will pay a dividend of $0.95 per share on November 13, 2017. Shareholders who hold the stock as of October 10, 2017, will be eligible for the dividend. Air Products and Chemicals set November 13 as the record date. It will be Air Products and Chemicals’ final dividend for 2017. It’s important to note that Air Products and Chemicals follows October 1 to September 30 as its fiscal year. Praxair paid its 3Q17 dividend of $0.7875 per share on September 15.

APD Didn&#8217;t Change Its Final Quarterly Dividend for 2017

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Air Products and Chemicals’ dividend of $0.95 represents dividend growth of ~10.50% on a year-over-year basis. With this dividend, Air Products and Chemicals’ dividend for 2017 would be $3.71. Since 2012, Air Products and Chemicals’ dividend has grown at a CAGR (compound annual growth rate) of 8.20%, which is similar to Praxair.

Free cash flow

A positive free cash flow is necessary for any company to support its dividend payment, share buybacks, future expansion plans, and many other financial activities. We’ll see how Air Products and Chemicals’ free cash flow is supporting its aggressive dividend growth policy. In 2012 and 2013, Air Products and Chemicals had negative free cash flow. Between 2014 and 2016, its free cash flow per share grew at a CAGR of 60%. At the end of Air Products and Chemicals’ fiscal 3Q17 earnings, its free cash flow per share was $3.60. Air Products and Chemicals’ free cash flow has been strong in the past three years. The free cash flow can easily support its dividend growth.

Investors looking for indirect exposure to Air Products and Chemicals can invest in the Materials Select Sector SPDR Fund (XLB). XLB has invested 4.70% of its portfolio in Air Products and Chemicals. The fund also provides exposure to Monsanto (MON), LyondellBasell (LYB), and PPG Industries (PPG) with weights of 8.30%, 4.50%, and 4.40%, respectively, as of September 19, 2017.

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